Friday, November 4, 2011

Mining scam: Jagan Reddy appears before CBI; party workers protest












Hyderabad:  Jagan Mohan Reddy is being questioned by the CBI today on his links with Karnataka mining baron Gali Janardhana Reddy. The YSR Congress leader was summoned by the investigating agency yesterday. Some of his party workers have gathered outside the CBI office and are raising slogans in protest.

Janardhana, the former Tourism Minister of Karnataka, was arrested on September 5 for illegal mining. His company, Obulapuram Mining Company (OMC), has been accused of mining in forest areas, and of illegally exporting iron ore.

Even as the CBI is getting ready to question Jagan, it is conducting searches at a mining company associated with Janardhana Reddy at Sandur in Bellary.

The CBI is likely to question Jagan Mohan about Red Gold and R.R. Global Enterprises which the agency believes serve as conduits between Jagan Mohan Reddy and Janardhana's OMC. Red Gold and R.R. Enterprises are registered at the same address as the address of Jagan Mohan's company, Jagathi Publications which owns the famous Sakshi newspaper.
Jagan Mohan is also being investigated separately for corruption.
The CBI has alleged that his father, YSR Reddy, who was one of Andhra Pradesh's most popular Chief Ministers, had granted licences and contracts to companies who invested in different businesses owned by Jagan.

In June 2007, YS Rajasekhara Reddy, along with his son Jagan Mohan, was seen at the foundation-stone ceremony of Gali Janardhana Reddy's Brahmani Steels in Andhra Pradesh's Kadapa district. Even at that time there were allegations that YSR had given away 10,670 acres of government land at throwaway prices.

"They say me and my son actually own this and Gali Janardhana Reddy is a benami...The opposition is making such wild allegations," YSR had said then.

Today, Gali Janardhana Reddy and Jagan Mohan Reddy are both facing a Central Bureau of Investigation (CBI) probe that is also investigating financial links between the two.

The YSR family and Gali brothers were seen to have enjoyed a symbiotic relationship that helped both parties. It was YSR Reddy, who granted Janardhana the lease for his mining operations in Andhra Pradesh.  

NDTV has access to documents which show that Red Gold is a partner of OMC. According to a registered agreement, OMC was obliged to sell 50 per cent of all iron ore mined, at operational cost plus five per cent, to Red Gold. This was said to be for help in identifying deposits and getting licences and permissions. Critics have pointed out that such a consultancy being worth some Rs. 400 crore per annum is unheard of.

RR Global Enterprises, another trading company dealing with iron ore, has reportedly invested Rs. 44 crore in Jagati Publications.

Jagan Mohan has been reacting with anger to reports of his alleged links with the Gali brothers. "Ask the BJP... what do I have to do with it?" he snapped when reporters asked him about Janardhana's arrest.

Jagan is one of India's richest politicians. He represents his father's constituency, Kadapa, in the Lok Sabha. Before he won his election in May, he declared assets worth Rs. 365 crore - a massive increase from 2009, when he had said his assets totalled Rs. 77 crore.

The challenge for the CBI, now, would be to connect the dots between OMC, Red Gold, RR Global and Jagan's media outfits to establish in a court that the fund flow violated the law of the land. However, observers say that is unlikely to be a simple affair.

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